FILED: NEW YORK COUNTY CLERK 12/29/ :42 PM INDEX NO /2015 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/29/2015

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1 FILED: NEW YORK COUNTY CLERK 12/29/ :42 PM INDEX NO /2015 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/29/2015 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK RCE RECOVERY LLC, Plaintiff, Index No. -against- EMX HOLDINGS LLC, Defendant. Memorandum of Law in Support of Motion for Summary Judgment in Lieu of Complaint PRESS LAW FIRM PLLC 144 East 44th Street, Eighth Floor New York, NY Telephone: (212) Facsimile: (347) mpress@presslawfirm.com 1 of 6

2 Table of Contents PRELIMINARY STATEMENT... 2 STATEMENT OF FACTS... 2 ARGUMENT... 4 CONCLUSION of 6

3 Plaintiff RCE Recovery LLC ( RCE ), by and through its undersigned attorneys, submits this memorandum of law in support of its motion for summary judgment in lieu of complaint against Defendant EMX Holdings, LLC ( Holdco ), as set forth below. PRELIMINARY STATEMENT This action arises from the failure of Holdco to pay the sum of $500,000, plus interest at a rate of 6% per annum, or $51,910.11, pursuant to a Convertible Promissory Note made as of January 8, 2014 (the Note ). Accordingly, RCE requests that the Court immediately enter judgment against Holdco in the amount of $550, pursuant to CPLR STATEMENT OF FACTS On December 19, 2011, Plaintiffs Recurrent Capital Bridge Fund I, LLC, Cragmont Capital LLC and Ethan Einwohner (the Underlying Plaintiffs ) commenced an action (the Underlying Action ) in the Supreme Court of the State of New York against ISR Systems and Sensors Corp. ( ISR ), EMX Group, Inc. ( EMX Group ), EMX International, Inc. ( EMX International I ), EMX International LLC ( EMX International II ), EMX Holdings, LLC, James M. Herrmann, Robert V. Gibbs and Timothy J. Arion (collectively, the Underlying Defendants ) captioned Recurrent Capital Bridge Fund I, LLC, et al. v. ISR Systems and Sensors Corp., et al., Index No /2011. See Affidavit of Ethan Einwohner ( Einwohner Aff. ) 2. On January 25, 2012, the Underlying Defendants removed the Action to the United States District Court for the Southern District of New York, where it is captioned Recurrent Capital Bridge Fund I, LLC, et al. v. ISR Systems and Sensors Corp., et al., Civil Action No. 1:12-cv (SAS) (KNF). See id. 3 & Exh. 1. On January 9, 2014, the parties to the Underlying Action mutually agreed to resolve their 2 3 of 6

4 dispute in a Confidential Settlement Agreement and Mutual Release (the Settlement Agreement ). See id. 4 & Exh. 2. Under Section 1 of the Settlement Agreement, Defendants agreed to provide Plaintiffs with settlement consideration, including a 6% convertible promissory note in the amount of $500,000 issued by Holdco, payable on or before October 1, See id. 5. Accordingly, Holdco issued to RCE a Convertible Promissory Note in the amount of $500,000, plus interest a rate of 6% per annum, compounded at the end of each calendar quarter. See id. 6 & Exh. 3. The Maturity Date of the Note is October 1, See id. On a number of occasions prior to the Maturity Date, including on July 31, 2015, RCE gave Holdco oral and written notice of its intent not to exercise the conversion feature of the Note, and to require payment of the Note in cash upon the Maturity Date. See Affirmation of Matthew J. Press ( Press Aff. ) 2 & Exh. 1. By letter dated September 24, 2015, RCE gave notice to Holdco that the Note was due on October 1, 2015, with principal in the amount of $500,000, along with interest in the amount of $51,910.11, for a total of $551, See id. 3 & Exh. 2. Holdco failed to pay any amount due under the Note, and remains in default. See Einwohner Aff. 7. Holdco acknowledged its default on October 16, See Press Aff. 5 & Exh. 3. Thus, RCE is now entitled to the sum certain of $551,910.11, as of October 1, 2015, plus 6% interest, along with 9% statutory interest, commencing October 1, See Einwohner Aff of 6

5 ARGUMENT Where an action is based upon an instrument for the payment of money only, the plaintiff may enforce it by a motion for summary judgment in lieu of complaint, pursuant to CPLR See N.Y. C.P.L.R (McKinney); Boland v. Indah Kiat Fin. (IV) Mauritius Ltd., 291 A.D.2d 342, 343, 739 N.Y.S.2d 122, 123 (1 st Dep t 2002) ( CPLR 3213 is available where a right to payment can be ascertained from the face of a document. ); J.D. Structures, Inc. v. Waldbaum, 282 A.D.2d 434, 436, 723 N.Y.S.2d 205, 207 (2 nd Dep t 2001) (granting summary judgment in lieu of complaint for unpaid portion of compensation due under settlement agreement). To establish its entitlement to judgment, the plaintiff need only (1) establish the existence of the instrument, and (2) submit an affidavit of nonpayment. See, e.g., Poah One Acquisition Holdings V Ltd. v. Armenta, 96 A.D.3d 560, 946 N.Y.S.2d 571, 572 (1 st Dep t 2012) (enforcing guaranty); Nordea Bank Finland PLC v. Holten, 84 A.D.3d 589, 590, 923 N.Y.S.2d 464, 465 (1 st Dep t 2011) (finding reference to guaranty in underlying agreements did not create issue of fact precluding summary judgment); Bank of Am., N.A. v. Solow, 59 A.D.3d 304, 874 N.Y.S.2d 48 (1st Dep t 2009) (upholding grant of motion upon guaranty). It is undisputed that Holdco issued the Note to RCE, and that the Note is a valid and existing instrument. See Einwohner Aff. 5-6; Press Aff. 4. The Note provides that, on or before October 1, 2015, Holdco must pay RCE the sum of $500,000, plus interest a rate of 6% per annum, compounded at the end of each calendar quarter. See Einwohner Aff. 6. RCE did not exercise the conversion feature, and duly notified Holdco that it would require payment in cash on the Maturity Date. See Press Aff. 2. As of October 1, 2015, Holdco was obligated to pay the principal amount, plus $51, in interest, for a total of $551, of 6

6 Accordingly, the Court should now enter judgment in favor of RCE and against Holdco in the amount of no less than $551,910.11, plus statutory interest at a rate of 9% per annum. CONCLUSION In view of the foregoing, REC respectfully request that the Court grant it summary judgment against Holdco, and grant all such other and further relief as the Court deems just and proper. DATED: New York, New York December 29, 2015 Respectfully submitted, PRESS LAW FIRM PLLC By: Matthew J. Press Matthew J. Press 144 East 44th Street, Eighth Floor New York, NY Telephone: (212) Facsimile: (347) mpress@presslawfirm.com Attorneys for Plaintiff 5 6 of 6